RETAIL ADDICTION

The worst store cards which charge up to 34.9% interest revealed

By Hollie Borland

9th October 2017, 6:03 pm

HAVE you ever been at the checkout when the cashier’s asked if you’d like to get 20 per cent off your next shop if sign up to a store card?

Shoppers should know that these are actually credit cards and some charge ridiculously high interest rates – up to 34.9 per cent a year – on your purchases.

Although retailers entice you with discounts if you sign up to their store cards, they also charge seriously high interest rates

Let’s put this into prospective – most standard credit cards have an APR of around 18 per cent, and some low rate cards even offer APR under seven per cent.

APR is compounded interest month on month and it’s easy for it to spiral out of control.

So if you’re making your purchases on one of these high street store cards, then you could be spending another 34.9 per cent a year on top of what you’ve already spent in the shop.

Often sold with the promise of “buy now and pay later” and combined with tempting offers, it can be hard to resist.

The store card perks don’t seem to outweigh the high APR interest rates

Stores make it even more irresistible to sign up by offering attractive deals and discounts, exclusive to those who take out a card.

But you should really hold off from getting one until you’ve read the small print – especially as debts you rack up on them can affect your credit rating.

The Sun Online looked into these store cards and their interest rates and here’s what we found.

Are the perks worth it?

Very

Online fashion retailer, Very, offer £10 off your next shop when you take out a card and use it to pay.

But they also charge a whopping 34.9 per cent interest if you don’t pay it off within 56 days of making your purchase.

Dorothy Perkins and Burton

Store cards offered by Dorothy Perkins and Burton are in partnership with MasterCard and offer 29.9 per cent APR.

They’re not restricted to being used in just those stores but you’ll be able to collect more points if you do.

These points will then be sent as vouchers in the post to be spent in store.

For every £1 you spend, you’ll get two points and 100 points is equal to £1 spending money.

What else is there to help me pay for my high street shopping?

STORE cards aren’t the only thing that will help you with your high street shopping.

Look at taking out a 0 per cent purchase credit card. You won’t be charged any interest rates for a set period of time but you’ll only be accepted if you’ve got a really good credit rating.

It’s worth checking to see whether you’re eligible for one before you apply because a rejection can leave a stain on your credit history. You can check using this .

Always pay off in full each month – or before the end of the interest free period – to avoid getting into debt.

Credit cards should be used to help with cash flow and not to bridge the gap between paychecks.

Otherwise, you’ll end up building more interest than you can pay off.

Although these cards offer in store benefits, those wanting a credit card to help with cash flow are better off shopping around for a standard credit card with a lower interest rate.

Warehouse

Clothes store Warehouse also offer a high APR rate of 29.9 per cent.

Although you’ll be able to spend a one off gift voucher for 20 per cent off once you sign up, if you don’t pay off your debts in the 55 days, you could be lumped with a hefty additional sum.

New Look

You’ll get 20 per cent off your next purchase after you’ve signed up to the credit card, but if you miss a payment, you’re looking at paying an APR interest rate of 28 per cent.

TAKE THE CREDIT How to check your credit rating, what is your personal credit score and what is the credit rating scale?

Topshop

Topshop’s store card offers the lowest interest rate at representative 19.9 per cent APR variable.

Although you will get to take advantage of various one-off perks when you take on out, the interest rate is still higher than a standard credit card.

With NextPay, you’ll be given a £10 off voucher to spend on your next purchase worth over £15.

But the 22.9 per cent APR can easily still eat into your debts.

It’s also worth bearing in mind that some of the financial services who provide the credit cards for the retailers, like Topshop, also charge you £3 for a paper bank statement too.

The exclusive discounts offered by high street retailers when you take out their store credit cards don’t feel like they out weight the high interest rates.

Don’t be pressured into signing up for a store card at the cashier and definitely don’t fall for the sign up perks before checking out the small print.

The Sun Online has reached out to Very, Topshop, Dorothy Perkins, Burton, Warehouse, Next and New Look but they have not got back to us before publishing.

City watchdog has warned that five million shoppers are struggling to pay of their credit card debts.